Winnipeg | CNS Canada –– Canada’s grain transportation system is running relatively smoothly for the time being, but there is still plenty of room for improvement — and better communication between participants is seen as a way to alleviate future bottlenecks.
The 2013-14 crop year, with its logistical challenges and, eventually, federal government intervention, are still fresh in the mind of many in the Canadian grain sector.
The 2013-14 record large crops grown in Western Canada were an anomaly, but production levels are still steadily growing and the “pressure is on the system to handle the rising production,” Bruce McFadden, director of research and analysis with Quorum Corp., told the Cereals North America conference here Tuesday.
Canada’s primary elevator storage capacity bottomed out at five million tonnes in 2005, but has been steadily increasing over the past decade to sit at roughly 6.5 million tonnes, which will help accommodate larger crops, according to data McFadden presented.
That added capacity will help if Canada runs into another burdensome supply situation, McFadden said, but added that while grain is moving relatively smoothly for the time being, “issues are inevitable.”
Asked where the next potential bottleneck in the system could be, McFadden pointed to a lack of communication and the need for all partners in the system to better understand what’s going on.
If the lines of communication are open and fluid, it will lessen the impact on whatever situation arises, he added.
Mark Dyck, director of logistics with G3 Canada Ltd., said the rail car supply relative to demand was now in balance, with both Canadian National and Canadian Pacific Railways (CN, CP) running close to current.
The grain companies were getting better at managing the pipeline now that it is a few years in with an open market for wheat, he added.
On top of improved communication, Dyck pointed to the sheer number of moving pieces when it comes to transporting grain. All those factors need to be looked at together to better improve the whole, he said.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.